BL Unit IV Assessment 2 of 3

BL UNIT IV ASSESSMENT 2
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BL UNIT IV ASSESSMENT 2
Credit would refer to as any money given to an organization, government, business and or individuals by a bank or any other financial institution (Cheeseman, 2004). It is an arrangement made between the lender and the customer establishing the credit limit that the customer may borrow against. In credit there are two major types of credit namely secured and unsecured. Herein are the major differences between the two as well as their comparison.
The major similarity between secured and unsecured credit is that they both have a credit limit. This is to say that the lender and the customer have to agree on the amount that the customer must receive against (Mathur, 2003). However, there are numerous differences between the two types.
One of the major differences is the presence of collateral for the credit. This is the asset placed as the security for the credit (Cheeseman, 2004). In secured credit, the lender requires a security or asset to sta...